Comment 1 for bug 442214

It's not that wrong. It means that the aligned objects move horizontally to line up on a common vertical line.
But you're right, it's not consistent with the other icons, and should be changed. To be consistent, the string should be "Center on vertical axis".

Unfortunately, we have reached string freeze, and unless we have additional time to commit the change and have it translated again (lots of languages are already 100% translated, and I'm not sure their translators have time to fix it now), it will stay inconsistent until the next release.